Multi-asset 

Wide exposure, but low in cost

  • To understand the basics about multi-assets funds
  • To understand who multi-asset funds would be suitable for
  • To understand the difference between passive and active multi-asset funds
CPD
Approx.60min
Wide exposure, but low in cost

Introduction

Advisers may think there is not much more to learn about multi-asset funds and strategies. 

But this type of investment strategy is still relatively new – many of the multi-asset funds and ranges available to clients are yet to build a long-term track record to show how they perform during all market conditions.

While some in the investment industry question the necessity for quite so many multi-asset products, this has not stopped fund groups from entering the multi-asset space, and neither has investors’ appetite for multi-asset waned.

The latest figures from the Investment Association show positive net retail sales inflows into its Mixed Investment sectors, which regularly top fund sales charts.

The appeal of multi-asset funds is they are able to offer investors exposure to a range of asset classes – as the name suggests – but in one product or fund. This helps keep costs down, while maintaining that asset allocation mix in portfolios.

There is another reason multi-asset funds are proving so popular at the moment, as Chris Cummings, chief executive of the Investment Association, explains in its most recent monthly statistics release.

“As the March 2019 Brexit deadline looms, investors are seeking to diversify and manage their risk, with global and mixed asset funds attracting strong inflows,” he says.

In August, this translated into net retail sales of £539m for mixed-asset funds, making it the best-selling asset class in the month.

However, advisers need to do their homework before helping clients choose a multi-asset fund for their investment portfolios.

Being able to invest across the asset class spectrum means many of these investment solutions adopt very different strategies, and can leave investors exposed to a range of alternative investments – or possibly overexposed to an asset class they are already invested in.

Tom Elliott, deVere Group’s senior international investment strategist, suggests: “A diversified multi-asset portfolio remains the best protection against what can be unpredictable markets. 

“This should contain exposure to global equities and bonds, with property, gold and cash also included.”

Ellie Duncan is features editor of Financial Adviser and FTAdviser.com

In this special report

CPD
Approx.60min
  1. According to Joe McGrath, who are multi-asset funds suitable for?

  2. According to Joe McGrath, what factor may push investors towards multi-asset funds?

  3. According to Geordie Clarke, which of the following is NOT a type of multi-asset fund?

  4. According to Geordie Clarke, for multi-asset funds absolute performance is more important than risk appetite and investment outcomes. True or false?

  5. According to Saloni Sardana, what is one of the biggest advantages that passive multi-asset has over active multi-asset?

  6. According to Saloni Sardana, funds with a short-term track record are best avoided, true or false?

Nearly There…

You have successfully answered all the questions correctly, well done!

You should now know…

  • To understand the basics about multi-assets funds
  • To understand who multi-asset funds would be suitable for
  • To understand the difference between passive and active multi-asset funds

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